Section 8 Fair Market Rent (FMR) for ZIP 47374 - 2027

Investment Score for ZIP 47374

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$780
1 Bedroom	$790
2 Bedrooms	$1,030
3 Bedrooms	$1,300
4 Bedrooms	$1,350
5 Bedrooms	$1,566
6 Bedrooms	$1,754
7 Bedrooms	$1,894
8 Bedrooms	$1,989

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$790	$67,323	1.17%	B
2BR	$1,030	$110,254	0.93%	C
3BR	$1,300	$180,116	0.72%	D
4BR	$1,350	$240,562	0.56%	F
5BR	$1,566	$294,164	0.53%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 47374 (Richmond, IN) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 47374 in Richmond, Indiana, is set by HUD for 2026. The FMRs are as follows: - 0BR: $730 - 1BR: $740 - 2BR: $970 - 3BR: $1210 - 4BR: $1480 These figures represent the maximum amount that a Section 8 voucher holder can pay for rent based on the number of bedrooms required. However, it is important to note that these FMRs are often higher than the actual rents charged in the local market. This means that voucher holders may face constraints in finding suitable housing within their budget. For example, the 2BR FMR of $970 represents 22.9% of the median household income in Richmond, which is $50,766. This indicates that voucher holders have a relatively high percentage of their income allocated towards rent, leaving less disposable income for other necessities. #### Affordability & Renter Profile In ZIP code 47374, 36.0% of the population are renters, indicating a significant portion of the community relies on rental housing. The occupancy rate stands at 86.9%, suggesting that the market is moderately occupied but not overly saturated. Given the median household income of $50,766, the affordability of housing is a critical issue. The Zillow median price for a 2BR property is $103,166, which is significantly lower than the FMRs, indicating that the rental market is likely to be more competitive than the purchase market. The price-to-FMR ratio for a 2BR unit is 8.9x, meaning that the median home value is nearly nine times the FMR for a 2BR unit. This suggests that the rental market is relatively affordable compared to the purchase market, making it easier for low-income households to find suitable housing. #### Investor Angle From an investor perspective, the ZIP code 47374 offers opportunities for cash flow-positive investments if the properties are priced at or below the FMRs. For instance, a 2BR unit with an FMR of $970 would generate a monthly rental income of $970, assuming the property is rented at the FMR. To determine the investment grade, we need to consider the potential costs associated with owning and maintaining the property. These include mortgage payments, property taxes, insurance, maintenance, and utilities. If the total cost of ownership is below $970, then the investment would be cash flow positive. For example, if a 2BR unit has a mortgage payment of $400, property taxes of $100, insurance of $50, and average maintenance and utility costs of $200, the total monthly cost would be $750. This leaves a net cash flow of $220 per month, which is positive and attractive for investors. #### Specific Actionable Insights 1. **Focus on 2BR Units**: Given the high demand for 2BR units and the fact that they represent 22.9% of the median household income, investing in 2BR properties could provide a steady stream of tenants. Additionally, the Zillow median price for a 2BR unit is $103,166, which is relatively low compared to the FMR of $970, making it a good entry point for investors. 2. **Consider Pricing Below FMR**: To ensure a competitive edge and attract tenants, pricing units slightly below the FMR could be beneficial. For instance, a 2BR unit priced at $900 would still be within the reach of many voucher holders while providing a buffer against potential increases in operating costs. 3. **Monitor Local Rental Prices**: Regularly monitoring local rental prices can help investors adjust their strategies. If actual rents are consistently lower than the FMR, there might be an opportunity to increase rents slightly without losing tenants. Conversely, if rents are approaching the FMR, it may be necessary to focus on reducing operating costs to maintain profitability. #### Bottom Line For Section 8-focused investors, ZIP code 47374 presents a mixed picture. While the rental market is relatively affordable, the high FMR-to-income ratio suggests that tenants may struggle to cover additional living expenses. Investing in 2BR units, priced slightly below the FMR, could yield positive cash flows and a steady tenant base. Therefore, the recommendation for this ZIP code is **Hold**. Investors should carefully manage their costs and monitor the local rental market to ensure long-term success.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). Demographics from U.S. Census (2024).

About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.